another advice needed thread.

[GodFearinGunTotin]

Just putting this out there, if this was turned into an investment property (ie rental) it is not unusual for taxes to escalate. In marion county, mine about doubled when I lost homestead credit.

When we refinanced one time, (I think it was) we forgot to re-sign up for that credit and had to eat it for one year...yeah, that was a noticeable change.

 

[Ellis]

That seems WAY too high for an adjustment to an existing escrow account. IMO your property tax would have to double or insurance quadruple to generate that kind of an adjustment. I'd have a chat with the lender or account servicer.

just got it today, going to be inquiring more with all we can talk to tomorrow.. I did not read anything about an investment property in the letter.

 

[RobbyMaQ]

just got it today, going to be inquiring more with all we can talk to tomorrow.. I did not read anything about an investment property in the letter.

Well, if you don't have a 2nd residence, then investment property need not apply.
Like GFGT mentioned, if you refinanced, and the homestead credit did not get re-upped, then that might account for the huge increase.

 

[spec4]

If you have at least a 20% equity position in your home, you should be able to ask that they waive escrow and you can handle it on your own. That eliminates confusion.

 

[BugI02]

Only thing I can think of was it a new build when you moved in? First years property tax (which is always a year in arrears) would have been on the value of the undeveloped lot. This time around it would be on the value of the house and land and could indeed go up that dramatically

 

[BugI02]

Also IIRC correctly escrow account always has to have MORE than the estimated need by about 30%



ETA: and you're paying PMI if you have less than 20% equity, the lower the equity the more PMI is but that would have been in there from the gitgo

 

[JollyMon]

Did you have an homestead exemption that you didnt file? Normally you have a few months after closing to get that done otherwise your taxes might shoot up the next year.

 

[looney2ns]

There is always the high possibility that the bank/mortgage co simply screwed it up. Happens frequently especially with the big mega banks.

 

[WebSnyper]

The letter that came in gave us two options, pay $2k+ before 8/1/15 or pay extra $160/ month till shortage caught up.

Just putting this out there, if this was turned into an investment property (ie rental) it is not unusual for taxes to escalate. In marion county, mine about doubled when I lost homestead credit.

When we refinanced one time, (I think it was) we forgot to re-sign up for that credit and had to eat it for one year...yeah, that was a noticeable change.

Well, if you don't have a 2nd residence, then investment property need not apply.
Like GFGT mentioned, if you refinanced, and the homestead credit did not get re-upped, then that might account for the huge increase.

Not signing up for the homestead exemption is one that gets a lot of people. Different counties/areas handle how you sign up for the homestead exemption differently. Check with your the gov agency that handles your property taxes and make sure your homestead exemption is filed. In Hendricks County this can all be checked online. Not sure where you are.

Only thing I can think of was it a new build when you moved in? First years property tax (which is always a year in arrears) would have been on the value of the undeveloped lot. This time around it would be on the value of the house and land and could indeed go up that dramatically

This can also bite you. Some less than stellar mortgage companies will estimate your property tax on what it was for the undeveloped land. If this is a relatively new build, this could be the issue. Then your real property tax assessment comes in and you get hammered because the appropriate amount was not being paid into escrow to handle the property tax.

Couple this with not filing the homestead exemption and you could have a real issue.

Bottom line, you should be able to look at all your escrow transactions (either online or on the mortgage/escrow activity statement) and compare it with what your property tax bill is, along with homeowners insurance and whatever your PMI rate might be. If something else is coming out of your escrow or the figures don't match, then track it down.

 

[Ericpwp]

If you are 80% lone-to-value you should be able to cancel the escrow account, and manage the taxes and insurance yourself. It is all on you to have the money when it comes due, so if you won't save the money for when its due, canceling may not be right for you. Escrow accounts are forced savings to pay those bills, they are also interest free loans you are paying the bank. I have always canceled escrow when able. It helps me keep my finger on the pulse of money going out the door.